WorkCompCentral recently reported Commission Was Improper Venue for Debate on Settlement Going Toward Child Support. The situation arose in Maryland when an injured worker settled his entitlement to workers' compensation benefits. After the settlement, the insurance company did not deliver the settlement proceeds. It sent a check for a medical evaluation and for attorney fees, but no settlement proceeds.
The employer/carrier explained that it had instead sent the settlement proceeds to the Bureau of Support Enforcement. That action, it explained, was because of existing child support arrears. After the settlement was reached, the Circuit Court entered garnishment writs. The injured worker filed no papers or response in those actions until after the employer/carrier had sent the settlement funds to the Bureau.
The injured worker then filed a "form" with the Maryland Workers' Compensation Commission. It essentially complained that the settlement proceeds had not been provided as stipulated. The amount due was $2,246.66. The Commission held a hearing, and the injured worker argued that his settlement proceeds were "exempt from garnishment" under the law. The insurance company did not agree with that perspective.
Following the hearing, the Commission issued a final order and concluded that the statute relied upon by the injured worker did exempt the settlement from garnishment in part, but did not rule entirely in favor of the employee. It concluded that 75% of the settlement was subject to garnishment and 25% was not. Therefore it ordered that the injured worker be paid $421.99.
The employer and carrier filed for review in the Circuit Court. In Maryland, there is this intermediate step between the workers' compensation adjudication and the appellate court system. The Circuit Court agreed with the 75%/25% distribution but concluded that actually the 25% could be garnished and the 75% could not be. The effect of the employer/carrier's seeking Circuit Court review was an order compelling it to pay the injured worker $1,684.99.
That led the employer/carrier to the appellate process, In The Court of Special Appeals of Maryland. That court concluded that the issue was different than noted by the Commission or the Circuit Court. The Court explained how "personal injury" proceeds were partially exempted from child support, up to 25%. And, the Court complimented the "well thought-out" presentation of "difficult legal questions."
Then the Court explained that the legal questions presented did not matter. The Court noted that the injured worker did not raise those issues in the Circuit Court that originally entered the garnishment order. The appellate court explained that "only a circuit court has subject matter jurisdiction over garnishment." The use of "only" means that the jurisdiction is "exclusive." The Court noted that the injured worker did not participate in the garnishment proceedings, nor did he raise the exemption argument there.
The Court explained that any exemption to garnishment would take effect only if it were pled. The Court said "An exemption would not apply automatically," but only if the employee took "action in the garnishment proceedings" to assert and prove entitlement to the exemption; the injured worker did not do so. The Court held that waiting until after those garnishment proceedings concluded and then attempting to get the workers' compensation system to enforce or protect rights he failed to plead in the Circuit Court was procedurally inappropriate and flawed.
The Appellate Court noted that the Commission is not a Circuit Court (which has exclusive jurisdiction, as a court of general jurisdiction); in fact, the Court noted "the Commission is not a court at all." The law did not convey to the Commission the power of a "court" and therefore it was acting without authority when it heard the complaint regarding child support to begin with.
The WorkCompCentral story quotes practitioners noting that these disputes and issues have arisen before in Maryland. One laments that "employers and insurers are placed in a difficult spot when they learn that an injured worker owes child support," noting that anger may result.
The same issues periodically arise in Florida settlements. Section 440.20(11)(d)1. includes a charge to the Judges of Compensation Claims regarding any settlement:
With respect to any lump-sum settlement under this subsection, a judge of compensation claims must consider at the time of the settlement, whether the settlement allocation provides for the appropriate recovery of child support arrearages.
And, as a result, the Judges of Compensation Claims routinely order payment of child support arrearages from settlements. Over the last 15 fiscal years, the OJCC has collected $162,740,517 in child support arrearage. Judges periodically hear from injured workers that reported balances are incorrect, that previous payments have not been credited correctly, etc. The answer from the OJCC is generally similar to the Appellate Court in Maryland, "sort this out in the circuit court."
The determination of the amount of child support that is appropriate, or the accounting associated with payments, is an issue for the circuit court, which coincidentally is Florida's court of general jurisdiction. That is the place to argue about the imposition or amount of support amounts due. The OJCC merely enforces the collection of what that court orders.
Of course, if an injured worker finds herself/himself in disagreement with a reported arrearage, a request could be made to have the Judge of Compensation Claims delay ruling on the settlement distribution. That delay could be used by the injured worker to seek clarification from court officials or the Department of Revenue regarding the accounting questions. That delay could be used by the injured worker to seek an order from the Circuit Court regarding the arrearage amount.
Of course, if an injured worker finds herself/himself in disagreement with a reported arrearage, a request could be made to have the Judge of Compensation Claims delay ruling on the settlement distribution. That delay could be used by the injured worker to seek clarification from court officials or the Department of Revenue regarding the accounting questions. That delay could be used by the injured worker to seek an order from the Circuit Court regarding the arrearage amount.